Net Worth Update – January 2017

After December I generally find Januarys easy to handle, at least in the financial sense. This January was no exception. This is where my accounts stand:

Liquid Assets Dec-16 Jan-17 $ Change
Cash & Savings $832 $1,200  +$368
Emergency Fund  $1,500 $2,501  +$1,001
Short Term Savings $0 $75  +$75
Long-Term Savings $0 $43  +$43
Other $290 $303 +$13
Illiquid Assets Dec-16 Jan-17 $ Change
Savings Bonds $0 $500  +$500
Roth IRA $11,756 $12,824  +$1,068
Traditional 401K $11,521- $13,126  +$1,605
Liabilities Dec-16 Jan-16 $ Change
Credit Cards $0 $0 +$0
Medical ($175) ($100) +$75
Net Worth $25,724 $30,472 +$4,748
% Change +18.5%

Liquid Assets:

According to my Goal post , if everything went as planned in January, my liquid assets should have increased by $1,950. Collectively, my Liquid Assets increased by exactly $1,500 – $450 below target. The main reason why I missed this target is due to transfers into illiquid savings. I contributed a bit extra to my Roth IRA and I decided to turn towards i-savings bonds. When these are taken into account I actually saved and invested $2,165.

One change to my financial plan is the fact that I opened accounts for my short and long term savings goals. I will make a post on what these goals are soon. My long term savings will eventually be transferred to a brokerage account.

Illiquid Assets: 

The second change in my financial plan is the slow movement of my emergency fund over to i-savings bonds. I haven’t quite figured out my contribution schedule for this yet since I won’t be able to touch these funds for 12 months (this is why they are listed as illiquid right now). But the interest rates are better than banking. I’ll most likely purchase a $500 savings bond with my tax returns.

My retirement accounts increased nicely. As stated in an earlier post, the first two 401K  contributions were small the third was $738. Subsequent contributions will continue to be $738 to reach $18,000 by the end of the year.


I decided not to carry over any credit card debt this month and I would like to get into that habit. I still have medical bills to pay though.


As I said previously, January tends to be good on the budget. I did change my budget slightly from the beginning of the month. Namely, I increased my “Everything Else” expenses by $300 due to receiving $100 as a late Christmas present and a  $200 banking reward.

Category Budgeted Actual Remaining
Rent $1,650 $1,650 $0 left
Fixed Expenses $100 $89 $11 left
Food $200 $192 $8 left
Medical $440
Travel $77 $77 $0 left
Everything Else* $373 $423 $50 over
Total  $2,400  $2,431 $31 over

I ended up spending $100 on an Amazon prime membership, and $75 on a toothbrush. I’m hoping the toothbrush saves on some of my dental bills.  I gave $25 to a friend and don’t expect it back. I spent the rest here and there on various things, such as booking a hostel for an upcoming trip .

I don’t budget for medical expenses because my health is too important to place an upper limit on my spending.I spent $440 on medical expenses this month but I don’t anticipate that this spending category will affect my net worth for a while due to a well padded FSA and a health based rewards card provided by my insurance company. If I remember correctly it was around April when I depleted my FSA and rewards card last year. My health is much better this year, so I’m hoping they’ll last the entire year


I finished up my tax returns this month and it will be larger than anticipated. I should be receiving the federal portion on February 5. I am not sure how long it will take to receive the state portion.

Here is how I plan to allocate my return:

  • $500 in Emergency Fund
  • $500 in i-Savings Bonds
  • $100 in healthcare expenses
  • $70 Fun Money

The remainder will go towards my cash buffer in my primary checking account

Conclusions & Next Month

This was an incredible month. I stuck to my game plan and was able to save $215 more than I originally anticipated. Going back to my goal post, with taxes coming up next month, my goal was to increase my liquid assets by $1,125. I am going to roll over the extra savings from this month so I need to increase my liquid assets and savings bond category by $910 to stay on track.

Right now I have $4,622 in liquid assets and savings bonds. My goals now are:

  • February Goal: $5500
  • February Stretch: $5750
  • March Goal: $5750
  • March Stretch: $6000

Why I (currently) Have a Tiny Emergency Fund

I’ve gotten a few comments in the forums that I frequent about my dismal emergency fund. Right now I’m sitting on an emergency fund of $2,000 which isn’t even enough to cover one month’s expenses. The first thing I would like to say is I am working on building my emergency fund in 2017. If the stars properly align, I may even have a 3 month emergency fund in a couple of months.  Secondly I’m just going to admit that I am being gutsy.

When I first learned about the goodness of Roth IRAs my first inclination was to max it out. I read about the power of compound interest. I wanted the compound interest. I also read how an uninvested Roth IRA could serve as an emergency fund. I really just wanted the compound interest. So I invested my Roth IRA and went without an emergency fund for all of 2016. I worked on maxing out my Roth IRA for both 2015 and 2016 within the 2016 calendar year.  Maybe this is a taboo move in the personal finance blogosphere but hey I did what I wanted.

Still I wasn’t totally without access to “emergency” funds. I established an FSA account in 2016 knowing I had some costly health problems. This helped shelter the blow  of several thousand dollars in medical costs. I fully anticipate 2017 will be a year of high medical costs  due to the nature of my chronic illness. I hope it’s surprisingly less expensive, but I went ahead and funded my FSA even more than last year.  I also purchased disability insurance.  It’s also important to note that my retirement accounts serve as emergency funds for early disability retirement.

I became less compelled to establish an emergency fund as certain dates drew near. In September my lease ended and I began to rent my apartment month-to-month.  This means that if I do experience an emergency the $1,650 I spend in rent can be slashed very quickly.  My family also moved into the area and I now had a place to stay should I experience the emergency of all emergencies. My disability insurance will be effective in 3 months. Once it is effective, if I do get sick or injured I shouldn’t be without income for too long.

So I have no liabilities, and no recurring monthly expenses that are absolutely set in stone other than a $30 cell phone bill. In the worst situation I’d be able to lower my monthly expenses to about $1,000 by moving out of my apartment, placing everything in storage and moving in with my parents. I know one might think that relying on parents for emergencies may burden them, but that’s definitely not the case for my family.My intention wouldn’t be to rely on them financially, but just to have a place to stay. I have been 100% independent since I turned 18. When my older sister lost her job a few years ago, my parents wanted her to move in right away to minimize the damage to her finances.  It’s easier for everyone when you remain in the green versus the red.

So for all those reasons I focused on maxing out my Roth IRA, largely ignoring my emergency fund. I don’t regret my strategy probably because I had no real emergencies. As I said, I’m working on establishing my emergency fund in 2017. January is a month in which I will be seeing three paychecks. Since I only budget for two, the third paycheck will go directly to my emergency fund. It’s the end of the first week in January and my liquid holdings currently stand at:

  • Checking & Savings: $1,000
  • Emergency Fund: $2,000

According to the schedule I laid out, I expect to have an emergency fund large enough to cover 2 months of living expenses ($4,400) by the end of March.  My goal is to have an emergency fund of  $5,500 by the end of the year with an ultimate goal of $10,000 within the next 2-3 years.  Most likely I will be investing anything over $5,500.

Another mental note I’d like to make is that should I experience an emergency in 2017, I will be able to increase my income by $400 a paycheck by lowering my retirement contributions.  Even if I were to become unemployed, my paycheck is delayed enough to do this at least twice, for an additional $800 in one month.


Goals: 2017

It’s been one year since I’ve started to budget and diligently track my finances. As mentioned previously, 2016 went by fairly smoothly, with no real surprises. While I didn’t quite meet all my financial goals, it was an impressively successful year. I received a promotion towards the end of 2016, which will make 2017 that much more interesting. The promotion  increased my income from a $65k annual salary to $80k.  Now thanks to the extra $15k in income, I have some new financial objectives that weren’t otherwise obtainable. My goals for 2017 are as follows:

  1. Maximizing 401K and Roth Contributions
  2. Building emergency fund to $5,500
  3. Planning 1-2 international trips (Asia & possibly Europe)

The plan to reach these goals is to start the year off fast and furious by doubling my emergency fund by the end of this month. January just so happens to be a month in which I’ll receive three pay checks, so this shouldn’t be hard…barring an emergency. For the first quarter of 2017 I’ll follow the saving and investing schedule below:

Date Roth IRA 401K Savings
2-Jan $212 $154 $475
16-Jan $212 $154 $475
30-Jan $212 $738 $1,000*
13-Feb $212 $738 $1,000**
27-Feb $212 $738 $125
12-Mar $212 $738 $125
26-Mar $212 $738 $125

*-three pay period month!
**-tax return

I chose this contribution schedule because it’s easier (for me) to save large lump sums  rather than small sums spread out over 26 pay periods.  The first two pay periods I will only contribute 5% of my salary towards my 401K (to obtain my employer match). The next 24 pay periods should consist of equal $738 contributions to my 401k.

These financial goals are a bit of a stretch. I spent on average ~$2,500/month in 2016.  The plan was to spend only $2,200/month and that remains the plan for 2017.  Due to the  increase in 401K contributions and the increase in deductions for items such as health insurance, my take-home pay will be $200 lower a month than in 2016. I have a lot less room to make mistakes.

I plan to use my Chase points to pay for my international travel. I have joined the league of credit card point churners.